Ice Lyli

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Ice-Fili (АЙС-θИЛИ) You cannot defeat a nation that enjoys ice cream at minus 40 Celsius. — Winston Churchill To survive in Russia’s ice cream industry during the 11 years since the collapse of the former Soviet Union was no small feat (see Exhibits 1 and 2). To be successful in these turbulent times was nothing short of amazing to industry observers. In 2002, Ice-Fili, a midsized Russian company with more than $25 million in sales, was Russia’s top ice cream producer. Surprisingly, it had outlasted several well-known international companies such as Ben & Jerry’s, which exited the Russian market in 1997, and Unilever, which left in 2001. Ice-Fili had not only successfully transitioned from the tight controls of the Soviet regime…show more content…
and Europe (reminiscent of whipped cream). Also, traditional Russian ice cream was made with all natural ingredients and did not contain preservatives. It was believed that Russian consumers were generally more concerned about preservatives in food than fat levels. According to an industry trade association representative, “Millions of foreigners, after arriving in Moscow and tasting our ice cream, have proclaimed Russian ice cream to be the best in the world.”7 In the selling of ice cream, many products competed for the consumer dollar, including beer (Baltica and dozens of other domestic brands), soda (primarily Pepsi and Coke), yogurts, chocolate (Mars, Nestlé, and numerous domestic players such as Red October), and other confectionary candies. The producers of these products often spent considerably more on advertising than ice cream producers.8 In 2001, ice cream producers spent less than $5 million on advertising in Russia (1% of sales), while the $4.5 billion Russian beer market spent approximately $90 million (2% of sales) and the soft drink industry spent almost $200 million (7% of sales) on advertising.9 The beer, soft drink, and confectionary industries enjoyed increasing market demand rather than the depressed trend found in the Russian ice cream industry. In 2000, the production of ice cream was down 3.5% from the year before; in
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